Correlation Between Geratherm Medical and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both Geratherm Medical and Diamyd Medical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Geratherm Medical and Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geratherm Medical AG and Diamyd Medical AB, you can compare the effects of market volatilities on Geratherm Medical and Diamyd Medical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Geratherm Medical with a short position of Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geratherm Medical and Diamyd Medical.
Diversification Opportunities for Geratherm Medical and Diamyd Medical
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Geratherm and Diamyd is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Geratherm Medical AG and Diamyd Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamyd Medical AB and Geratherm Medical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Geratherm Medical AG are associated (or correlated) with Diamyd Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamyd Medical AB has no effect on the direction of Geratherm Medical i.e., Geratherm Medical and Diamyd Medical go up and down completely randomly.
Pair Corralation between Geratherm Medical and Diamyd Medical
Assuming the 90 days trading horizon Geratherm Medical AG is expected to under-perform the Diamyd Medical. In addition to that, Geratherm Medical is 1.11 times more volatile than Diamyd Medical AB. It trades about -0.11 of its total potential returns per unit of risk. Diamyd Medical AB is currently generating about -0.12 per unit of volatility. If you would invest 109.00 in Diamyd Medical AB on August 27, 2024 and sell it today you would lose (10.00) from holding Diamyd Medical AB or give up 9.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geratherm Medical AG vs. Diamyd Medical AB
Performance |
| Timeline |
| Geratherm Medical |
| Diamyd Medical AB |
Geratherm Medical and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geratherm Medical and Diamyd Medical
The main advantage of trading using opposite Geratherm Medical and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geratherm Medical position performs unexpectedly, Diamyd Medical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Diamyd Medical will offset losses from the drop in Diamyd Medical's long position.| Geratherm Medical vs. Superior Plus Corp | Geratherm Medical vs. NMI Holdings | Geratherm Medical vs. Origin Agritech | Geratherm Medical vs. SIVERS SEMICONDUCTORS AB |
| Diamyd Medical vs. Superior Plus Corp | Diamyd Medical vs. NMI Holdings | Diamyd Medical vs. Origin Agritech | Diamyd Medical vs. SIVERS SEMICONDUCTORS AB |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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